Tags: Americans | UK | Passports | Taxes

More Americans in UK Surrender Passports to Dodge Taxes

Wednesday, 04 Aug 2010 07:32 AM

A growing number of American expatriates living in the United Kingdom reportedly are giving up their U.S citizenship to avoid paying taxes.

The Financial Times reports that the trend of Americans giving up their passports in order to escape paying U.S. tax on their worldwide income and capital gains has grown since the simplification of U.S. tax laws in 2008.

The rules are far less complicated than they were. A one-time exit tax is levied on all income and capital gains – this applies to those holding assets of more than $2 million and includes pensions, deferred compensation, unrealized gains from properties and investments and interests in foreign trusts.

If you have less than $2 million (1.5 million euros, 1.3 million pounds), you escape most penalties.

“If you can get below that $2 million net-asset-value snapshot, it’s fairly easy. You escape the exit tax,” says Richard Cassell, a partner at Withers, the law firm. “But few people want to write the check if they have more than that. It becomes painful.”

A few advantages are gained by forfeiting U.S. citizenship, accountants say. Chief among them is that doing so widens one’s investment choices. “It removes the possibility of a super-complicated life of having to juggle two different tax systems,” says Alex Jones, a director at Deloitte, the professional services firm.

“Being American presents you with a very particular and peculiar set of problems from a tax perspective and over the next few years, it could get worse for the wealthy,” he adds.

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A growing number of American expatriates living in the United Kingdom reportedly are giving up their U.S citizenship to avoid paying taxes. The Financial Times reports that the trend of Americans giving up their passports in order to escape paying U.S. tax on their...
Americans,UK,Passports,Taxes
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2010-32-04
Wednesday, 04 Aug 2010 07:32 AM
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